Starwood Hotels posts second quarter loss of US$263 million
Starwood Hotels & Resorts Worldwide reported a loss US$263 million (US$1.56 per share) in its second-quarter earnings, mostly attributed to a large adjustment charge recognizing foreign-exchange effects on its historical hotel operations in Italy.
Even excluding this and other items, earnings for the second quarter rose less than Wall Street anticipated, hurt by lower-than-expected growth as the company continues to work through its merger with Marriott International.
Alan Schnaid, Starwood’s chief financial officer, said growth has been slower than expected this year. RevPAR inched up 0.7% rose by 1.4% in constant currencies.
“This slower rate of RevPARr growth will contribute to lower fee growth in the second half of 2016 than previously expected,” Schnaid said in a statement, adding that lower expenses should help offset the lower growth.
Starwood also said Tuesday that its deal with Marriott, subject to regulatory approval in China and other closing conditions, is expected to close in the coming weeks.
In the June period, Starwood completed the sale of The St. Regis Florence and The Westin Excelsior Florence for roughly US$213 million, resulting in a pretax gain of US$112 million. The company said this was more than offset by the recognition of a US$202 million cumulative foreign-currency translation adjustment loss associated with its historical hotel operations in Italy.
Excluding items, income from continuing operations rose to 71 cents a share from 69 cents. Revenue edged up 0.4% to US$1.25 billion.
The company said management fees, franchise fees and other income climbed 7.1% compared with the year-ago period, as core fees increased 3.9%.